A Venture Capital Company as described in Section 12J of the Income Tax Act, which came into operation with effect from 1 July 2009. Section 12J is a tax-based incentive designed to encourage individual and corporate investors to invest in a range of small and medium size companies by investing through Section 12J.
The aim of the incentive is to create a pool of passive investors who obtain an upfront tax deduction for investing with a manager who is responsible for making investments which stimulate the South African economy and create jobs.